Insurance Brokers Doing Business In Oklahoma Subject Themselves To Suit

Insurance brokers from London traveling to Oklahoma and marketing for business subject themselves to the personal jurisdiction of the State of Oklahoma when negligence is alleged for their failure to fulfil obligations. In Willbros USA, Inc. v. Certain Underwriters at Lloyd”s of London, 2009 OK CIV APP 90, Mandate Issued: 10-22-2009, the Oklahoma Court of Appeals determined a London-based insurance broker had sufficient contacts with the state to be subject to the jurisdiction of the court. In a well written opinion by Deborah B. Barnes, Presiding Judge, the appellate court correctly determined there were sufficient contacts to give the Oklahoma court the authority to resolve allegations asserted by the plaintiff, Willbros USA, Inc.

The facts were fairly simple. JLT, a London-based insurance broker, with its principal place of business in London, England, made trips to Tulsa, Oklahoma to meet with representatives of Arthur J. Gallagher & Co. of Oklahoma, Inc., for purposes of obtaining business. Willbros, a Delaware corporation, maintained its risk management department in Tulsa, Oklahoma. Willbros purchased a $25 Million excess liability policy through certain Underwriters at Lloyd’s, London. The business was placed using Gallagher as the retail agent and JLT as the London broker.

In April, 2004, individuals were killed on Olero Creek in the Nigerian River delta. Willbros was eventually sued by the families as a result of the deaths and reached an agreement for Willbros to pay $2,310,000.00 over and above its $1 Million liability limit under its primary coverage.

Lloyd’s asserted the claim was not timely reported as one of the grounds for refusing payment of the $2,310,000.00 excess claim. Willbros asserted it gave notice to Gallagher and JLT and accused the brokers of negligence in reporting the claim to Lloyd’s.

JLT, as a London broker, attempted to avoid jurisdiction in Oklahoma by claiming it did not have sufficient contacts with Oklahoma to subject itself to personal jurisdiction by the courts.

If a non-resident has minimum contacts with the state that do not offend traditional notions of fair play and substantial justice, then there is jurisdiction by Oklahoma’s long-arm statute. A single act or transaction in the state can make the non-resident amenable to suit for damages arising out of the transaction. The focus is on whether there is some act or activity in which the non-resident has availed itself of the privilege of conducting activities within the state thereby invoking the benefits and protections of its laws.

The appellate court determined JLT could have refused to enter into a contract with Gallagher, but knowingly and purposely engaged in business with Gallagher to place the risk of Willbros in the London market. Secondly, the court found JLT made several trips to Oklahoma where its representatives met with both Willbros and Gallagher to discuss insurance. Although JLT argued the visits were social in nature rather than related to the insurance coverage. Third, JLT maintained communications from its London offices with Gallagher in Tulsa about brokering insurance business, some of which was directly related to the policy at issue in the litigation. The communication took place by e-mail, telephone conversations, as well as regular mail. Lastly the court determined JLT voluntarily entered the stream of communications in Oklahoma to "purposely avail itself" of business.

In summary, if you are going to do business in Oklahoma (or probably any other state), then you are subjecting yourself to the jurisdiction of the court. The appellate court noted the opinion was solely on the basis of personal jurisdiction and made no comment as to the underlying merits of whether or not there was negligence by JLT or Gallagher.